052 What Will Accounting Grads Do Post AI?

Hey, welcome in busy week at aicpa.

Engage. But not too busy for Q and A Wednesday. Let's do it. We got a bunch of great questions from what are accounting grads going to.

Do after AI takes over?

Right.

What would I do if I started.

A new accounting firm from scratch tomorrow? How do I approach picking out a practice management system? Bunch of good questions. We're going to run through them all today.

Come on in, the water's warm.

Roll the music. Okay. Nathan Sosa raised this question and I think a lot of people have been asking it. What do we start having entry level staff do in an age of AI when AI is chopping out like another big old chunk of the simple, straightforward, easy to do entry level work? If AI is truly going to serve as like this bottomless, virtually no cost intern. What about the interns? What are they all going to do? Right? And I think the like, the easy, like short term outlook is, yeah, it's definitely going to gobble up some of that work. But you know what, like bigger picture. Like virtually every change, every tech change, every step improvement. I think we have always said this same thing, like back to the beginning of time, like when, imagine when people first got software to complete tax forms and they were like, you know what I'm worried about is the day that people turn up to work and they don't know how to fill in a tax form. And I mean, those days are so far in the past for most of us. I made a joke on Twitter a couple of months ago, something along the lines of when the first bacteria like crawled out of the oceans 6 million years ago, the bacteria that were still in the ocean were like, you know what I'm afraid of is that we're going to forget how to swim. Like, I think that has always been a thing and we've always said that about all change. And so like this is a totally valid question and I don't know the answer to it besides the fact that I do think this is how it has always been. So the reality is we'll probably be able to upskill our entry level folks faster, probably pull them into client facing stuff sooner. But I do think anytime we like are able to automate some aspect of what we do, that next thing is always, always seems to be their waiting. And right now, if we could get more help from juniors, especially help that doesn't cost us a thing, I think we would take it. Like, I don't, I don't see this. You know, most of our firms are not running at Absolute capacity. If you could snap your fingers and have more staff capacity, you would probably do that right now. So I. I don't know. I think it's given the state of hiring right now, like, I don't see firms necessarily turning away entry folks. If AI is able to do more of this, I think it probably comes down to there's going to be certain things that AI will be really good at doing and other things that it won't be doing. And the efforts of those entry level folks will probably just be focused on the stuff that it really stinks at, because there will be some of that. So I get it and I honestly agree. But I think we also kind of have to be mindful of like, how virtually all change like this in the past, I think has worked this way. And we've always said, what about the entry level people? And with offshoring, you know, when regionals and UP offshored all that associate level work and people said, what will the associates do anymore? Like, I feel like most of those problems have worked themselves out now. We have like some bigger, more systemic issues right now, just I think from a lack of fresh blood coming into that pipeline. So given the state of everything and how like you have declining CPA numbers and there's just fewer and fewer people, I don't know. I think right now virtually everybody is gonna take good juniors if they can find them. And if AI can serve as another one of those, like, that feels like a win for me. Ryan C. This was in regards to the episode about doing video deliveries for financial statements and for tax returns. One of the best things I ever did. Check that episode out if you haven't yet. Ryan said, I see the value in having succinct, pithy video. What were the highest impact areas of the financial statements that you covered in the video? To keep the video impactful, yet short. So the guide that we built out for the team had like basically a salutation block that's just like, how you doing? The next thing they were supposed to do is start at the balance sheet, always address cash, always address trends there to ensure that that makes sense with the client's expectations. Anytime there were new fixed assets, we address those as well. Wouldn't like show ledger detail, but if it went up by $5,000, you'd just say like, yeah, this went up because you bought the forklift and whatever else. Those were things. We basically had like these kind of types of accounts where there were accounts that you always had to acknowledge, accounts that you only acknowledged if they changed and otherwise we didn't really acknowledge those accounts. So coming down through the balance sheet, we pay close attention to stuff like cash, air, ap, stuff like that. Any new debt, any debt that went away. And then on the P and L, there were a couple of things we, a few things we always address like sales, gross margin, net profit, that sort of thing. But then because when we delivered those financials, we usually had a comparative like percentage or dollar or something like that. Anything beyond a certain threshold we would acknowledge. We would also always acknowledge anything payroll related. So like wages and all that, even if it was more or less the same as the previous month, that was one of those things that we delineated to always point out. And that guide for the team and even for you, if you're getting started, is really helpful because your brain does a weird thing when you hit record. It just does like that's just human nature. And even just having that guide, whether it's scribble down on something on your desk or on another monitor, having that, that guide to just like visually be able to cruise through as you do it, to be like, oh yeah, I should, I should mention salaries and wages, expense accounts like these reviews can be as simple as that. And that's a great place to start. But over time they take on a life of their own. As a client asks a follow up question, you know, why? What was the case on this and that with rent? And then the next time you go to record one, you remember that note from the previous time and maybe you acknowledge rent and they kind of take on lives of their own. But that starting point for me was really helpful to get them out the door and also enable the team to do it. I think the main thing to remember here is when you are looking at a financial statement, you are operating at like this 200 IQ level that your client is not. They're at like that 60 IQ level. And so while you feel this, you feel more pressure than necessary usually to like identify something novel that's there because we overestimate the degree to which the clients understand them. And longer term, as they develop an understanding of that, like, sure, you can go deeper there, but I think it's really easy for us to overthink this one. So we kept it super simple.

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App or just use the link in the show notes. That's probably easier than figuring out what I just said. Another one from Ryan. See your delivery on videos. Engaging, clear and entertaining. Do you obtain any coaching or training? Ag voice coaching and if so, what are some resources? Good old fashioned doing it really bad for a long time. So I started publishing videos publicly that weren't great. But I also built video into my internal processes within the firm. So there were certain recurring things that I needed to do where instead of delivering it over email or slack message or live meeting or something like that, I would instead shoot a quick little video and send it off. And that was a really low stakes way to get in a bunch of repetitions. Then when I started delivering stuff to clients, got in a whole bunch more repetitions. But you absolutely could get a coach. But I think even when you have a coach there will be no replacement for repetitions. So think about whether there's ways in your day to day within the firm that you can build repetition into your routine, into your habits. Like what are the things that you do every single week with staff? Like maybe you, maybe you're a reviewer and you send review notes back to the staff. Think about shooting like a 60 or 90 second note just like, or video just overviewing the notes like so that they understand all the things that you're referencing. Like, try to find a way to build that into your process somehow because that will force you to get more repetitions in. Ultimately that's what's going to make you come across more clearly and confidently. I was even just talking with, you know, Blake Oliver tonight about talks that I have at this conference. And sometimes when you come into talks like everything isn't totally nailed down and so you have to have to come for level two, like kind of do some freewheeling and like be able to speak from those prompts clearly and concisely. And I was just telling him like doing this daily podcast like I did it for a bunch of reasons, but one of those reasons was to develop like that superpower of being able to speak clearly and logically from a prompt on a whole bunch of different topics. And you're gonna get better. Like, even if nobody listens to the podcast, I was like, I'm gonna get a lot better at this. Because in my main YouTube channel videos I always spoke and I still do. I use a teleprompter because it just makes production way faster. But when you get up in front of somebody at a conference and you don't have a teleprompter, like, that's a completely different skill, right? So part of this was like, I was, I'm exercising the heck out of that muscle to be able to do that stuff in a clear way. And coming into talks, like, I just have a completely different level of confidence because I'm getting up in front of people to talk about a topic that I've known I was going to talk about for six months. And it's like, you know, I do, I do a bit of prep for these meetings. Like I do, I organize notes and all that stuff. And so I may spend 30 minutes. I said meetings, these podcast recordings, I may spend like 30 minutes prepping for these. But like, to get up in front of people and talk like that is now a skill that I've developed just through a whole bunch of repetition where that's really easy for me and I can do that confidently. So think about how you can like develop that skill for yourself because that is something that will like always pay dividends. Like this skill that I've developed, man.

I'm 34 years old.

Like, think of all the different ways through the rest of my life I will benefit from this skill that I've like been fortunate enough to have the time and the space to develop. Like, think of yourself as like, how can I stack these abilities that will always serve me? And being confident and speaking clearly on video, like, that's totally one of those skills. So figure out how that's something that you could build into your routine because it'll absolutely aid you. I thought this was a great discussion point from Derek Foote. Not so much a question necessarily, and is also on delivering stuff over video. The one thing I still struggle with is if video is a added value, should we increase prices implementing it? Or if you think of the value of your time, do you need to charge more for the extra time and steps? For those clients who still want a wrap up meeting, now you're giving them more, which seems to necessitate a price adjustment. Yeah. The way I approached it was we're going to do it for everybody, whether they like it or not, because that's how we wanted to deliver our services. And ultimately you're never going to deliver your services that are away for everybody. But because it was our decision and not something that the client asked about, we set the expectation of those videos should be three minutes or less and they should take five minutes or less to put together. My rule of thumb is like my number one rule I always give people about doing video, sit down, record the whole thing until you're done. You're going to make mistakes. If you do keep recording, go back to the beginning of the previous statement and then at the end with loom, you can just clip out the mistakes so that you just have one clean take in the end. And that should not take more than five minutes. And that, like, I was comfortable, like eating that five minutes on those deliveries, like, because oftentimes these are big projects that you could put a couple hours into. And I honestly believe in our case, I think those, those video deliveries saved just as much time in meetings as they cost in shooting those videos. So I didn't charge more for delivering those videos, but I also didn't charge less when that final meeting wasn't necessary. Right. So, like that, to me, I don't know what that ultimately netted out to be, but the bigger picture thing for me was it was taking us on a path to attracting more people that really valued us delivering the service in that way. So maybe it impacts their renewal ultimately and if that's something that is a great fit for them. Derek also had to know, what do you touch on for a tax return in only two or three minutes to have sufficient value?

I don't, to be honest.

I think this is kind of, kind of like with the financial statements. I think we see the complexity and all the work and all of the nuance that went into that thing that we just did. But when we send it to clients, like right now, I think they spend virtually no time at all digging into it. They just want to know what they have to do, like, tell me where I want to cut the checks and stuff like that. Now, that's not all clients, but by and large, I think, you know, clients, unless I sit down and go through it with them, they don't generally have an interest in digging in and understanding the mechanics of the return. And I would say this is most clients. So even sitting down and running them through the return for three minutes, it's shocking how much the client can learn because I think in most cases they're genuinely coming from nothing. Like they know how to sign an 8879, they know how to make a payment online, how to mail in a check, that sort of thing. And I honestly think that's the extent to which most clients are digging into that stuff. So within two or three minutes like you can run em through like the outcome on the schedule C and probably the tax return summary is something that you always go into. The tax return summary is also helpful as a springboard to remember like oh yeah, this thing changed this year and then you jump to the place in the tax return where that thing changed. But I think for me what I would generally do is I would go through the T letter. So like what are all the actual things that they need to do? I also bullet pointed those things out in the email so it was as clear as possible what they needed to do. But I would skim through that real quick in case that wasn't clear. I would also go through the tax return summary and like take a look at any of the big year over year changes. And that was about it. And I had some clients that I knew were real nerds and themselves would go deeper than that. And for those people I would do more because because I knew they would appreciate it and it was more likely it would save me having to answer those questions anyway. But even something at three minutes in my opinion, I think that is more than a lot of folks are even spending with the return to begin with. So I think generally we would be surprised how much we can actually teach a client in just that short amount of time cruising through their PDF. I don't know. I know a lot of other folks that tune into this do video deliveries. When you do tax return deliveries, what are the sort of things that you highlight? I never had, you know we had almost like an SOP for financial statement delivery videos where we're like here are the things you need to go over. We never went that far delivering it for tax. But if you've got something like that, anybody out there in the Potterverse, I would love to love to hear what you built.

Kara White Appreciate your content.

What would you appreciate you Kara, thank you for being here.

What would you do if you started.

A brand new accounting firm? Well I'd be bummed out for one cause I wouldn't be able to do silly things like that. She said video perhaps. I think the I get this question pretty frequently. I think the last time I Answered this. I said, probably something around software, like, find a way where. One thing that was really interesting to me in firm running was helping clients to integrate their systems and, like, build little integrations that would save them a pile of time. Like, when you have this deep understanding of the client's systems and you yourself are a great integrator, you see that stuff sometimes and it just like, grinds your gears. You're like, good golly, there is such a better way to do that. And when we would stumble into situations when they would be like, oh, yeah, half of this person's time is spent on this. And we're like, that is a complete waste of time.

To me, that is an opportunity where.

We can use our, like, development and integration expertise and come in and say, like, hey, we're going to. We'll build a solution for, like, we will build for you a custom solution. We'll come in and set it up. We'll charge you 1500 bucks a month, and we'll make sure it keeps working. And we would do that for clients, and they would be absolutely tickled pink. They would be amazed by us. Like, we're not, like, putting. Pulling the wool over anybody's eyes. Like, we have this capability as accountants, especially if you're hustling cloud stuff that I think a lot of people overlook, that is very rare in business. And like, custom software development, that is expensive stuff. But oftentimes we were just building these integrations with Zapier or Integromat or make or whatever, or like a custom little mobile app, or like, we built like a Discord bot for one client that just pulled things together from different systems in a more helpful way. And why I love this stuff is it was a way to basically build passive revenue into your firm. And so because that's something that I enjoy that I'm particularly into, that's attractive to me. And I love the idea of over time building that base of passive revenue so that you have these really high margin projects. The more traditional path. Man, I did tax since I was 19. I still think I would go back and just try to figure out how to automate the heck out of a cast practice. I think I still. I think I'm still drawn to the accounting practice more so than tax. The hard thing I was always stuck between is I knew I needed to specialize more, and that was ultimately the best thing for the firm.

But when you grow a firm beyond.

A certain size, it becomes about what your team can do and what your team enjoys and not about what you do and what you enjoy, which is really irritating because I'd have my own interests and I would want to, like, specialize into these domains, but then ultimately, like, as long as you're the guy there. And we just saw this, actually, with the roast video that I posted on Sunday on the main channel. If you're a fan of the television show Community, this was a riff on the Darkest timeline, which is one of the greatest TV episodes of all time. Definitely check it out if you haven't watched it. But in this roast video, you've got a solo firm runner who is, like, in the new media niche, and everything goes through him, and he's the guy, and he's like, it doesn't matter who I pull in, I will still be the guy. And he's stuck at that point that many of us have gotten stuck at, where it's like, your clients think you're the expert and you're the only one that they will talk to. So I was always stuck between the most fun version of an accounting firm kind of being stuck between. I'm either going to run that as a really small thing, and I'm just going to be the guy for all my clients, and I'll have to be okay with that, and I'll have to get a lot of joy from that, or I've got to grow past that and then, like, build something for my team that they enjoy. But, like, ultimately, that would never align quite as well with the thing that I wanted to do. That being said, there's different types of joy to be taken from running a larger firm and, like, different challenges that go into that and all that. But it's definitely something worth thinking about as you're, like, deciding what. What version. You know, like, once you get from zero to one and, like, you're paying the bills and you've more or less got your workload fill filled up. There is such a man. There's so much to learn beyond that threshold about am I actually going to enjoy pulling myself out of the work? Do I still want to do the work? And should I build a firm just optimized around helping me do the work. That's a hard thing that I think folks struggle with and don't really know the answer to until they just do it or until they get it wrong. But that's life. That's one of those things that you just kind of got to do and accept the fact that even if you get it wrong, like, that's not a forever decision. Hey.

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Learn more in the link in the show notes below. Nathan Sosa. Maybe we can get some more advice for getting into the business of having kids. First, kiddo is on the way in three months. Buckle up. So any advice from accounting dads and moms would be awesome. So getting into the business of having kids, by the sound of things, you've already figured out how that works, boy. So I've got three kids. Got two and a two, a four and a six year old.

It's pretty great.

I owe much of the credit for me being able to record podcasts from a bathtub in Las Vegas to my wife and the ops team I have at home. That being my wife and the three kids. I think this is a bit of a generational thing, but I feel like. I feel like old timey work was, you know, the man goes in and does the work and he's left to do the work and there's not much collaboration there. And Sometimes that can be the easy thing for me to do. But in my experience, that whole, that whole relationship and ongoing bargaining of, like, what your professional life looks like and what the family life looks like, like, the more those decisions can be made together and like, in a more transparent way, like, the more it feels like everybody's on the same team. Because, like, if you go through seasons that are really challenging and you are pumping in a lot of hours and maybe it's not quite what you'd expect, you can absolutely give your partner grace, but it's a lot easier to give that person grace when you agreed on the terms to which, like, you came into this situation. It's one thing to be like, nope, I'm doing this thing now, and this is just how it is. Like, that's a lot harder person to work with. Then, like, here's where we're at. Here's what makes sense. Like, here are the different options. Like, what are we going to decide on a family? What looks like the right answer for now? That's something I haven't always gotten. Right. And if I could give you one bit of advice. Yeah, it's kind of agreeing on. On what those terms look like as a family and being okay with changing them because, oh, buddy, there is no slap in the face quite like having a kid. Whatever you think your plans were, like, they'll probably change in a really awesome way and, like, a way that will make you less selfish than you've ever been. Like, that was. That was just a big old rude awakening for me. Like, oh, wow. I was able to, like, focus on myself, you know, for these 30 years until I'd gotten to this point. And now I have to put this other human first. But it's the best also, like, if you have a child with a partner, like, that experience of having that project, I don't know, having that thing that is just so, like, special and specific to the two of you, like, caring about something that much, that insane amount. But then there being another person on this planet that shares that same level of, like, love and investment in this thing, like, that is like a really amazingly powerful thing. To some deep thoughts from the tub tonight. Let's do one more here. Where to start with Practice management systems. Oh, I recently started following you and I've listened to a few podcast episodes. Really enjoy the content. Thank you. I just started my own firm. Good for you. And I'm looking for an efficient, all in one practice management software. Aren't we all? That includes client accounts, a secure portal invoicing document storage, et cetera. Currently it's just me and I feel it will only be for me for the foreseeable future. Any info would be greatly appreciated. It's really hard to give people advice on practice management systems. There is a like threshold of legitimacy.

That I think you need to look.

For in your practice management system. So signals of legitimacy. To me, these are companies that are turning up at accounting conferences. Like, I mean, I'm obviously biased, but like the people who will pay to advertise on a channel like this, I think like that increases their legitimacy. The people who do that, like, it's because there's a level of what we're doing here that resonates with them. And to see that resonate through a product is also a really cool thing. So like in the big ecosystem of software where you don't know the difference between one or another, like these are things in my mind that add credibility to them because the reality is software companies are spinning up and shutting down faster than ever now. And the very last thing that you need is to build your entire organization around something that just could literally be gone the next morning. Like that is terrifying. So specifically with practice management systems where that is something that is absolutely mission critical to what you do, you gotta be careful there. So there's I don't know, maybe 10PMs in the space now that are like for small firms, cloud practice management systems definitely go with the cloud practice management system. There's maybe like 10 or so of those that are like, they're turning up at all the conferences, they're engaged in all this stuff. So like that is the first threshold for me. Beyond that, people react to these different tools in amazingly different ways and expect different things from them. And I genuinely don't know a solution besides just doing the hard work and familiarizing yourself with them. Generally with the smaller outfits, you're going to get more hands on support. It will be higher touch, you're going to see greater, you know, faster and more meaningful responses to your feedback than the bigger guys. If you're running a solo practice, there's a lot of very budget friendly options out there that work great for solo practices. Also, props to you for digging into this as a solo practice. I think a lot of solo folks will just like roll this stuff on Excel and it's not until that whole system breaks, when they make an hour or two that they're like, oh, now we got to go change to do something else. Great thing to do. From day one, you're going to be better positioned in the event you ever do want to pull somebody else into help down the road. But I would also say there's never been more upside than there is today because the client facing portals have gotten so well and because managing your client requests in a portal can be such a time saver. So I don't have a great answer for you. Besides, don't overcomplicate it. Like something initially that is fairly simple is probably totally fine. Look for like the legitimate practice management systems that are turning up consistently so that you know that these aren't companies that are going to disappear overnight and make the decision for you. Like if you've got a friend that makes a decision for themselves, like that is good social proof. But I do think that we all have slightly different software preferences and come at that problem kind of from different angles. So that's probably not one that I can make for you. That's probably just a matter of sitting on demos with those companies and doing trials if you can. Some of them will let you spin up a trial and that's really valuable to do. Kind of a dry run, but big decision for sure.

Hey, thanks for coming and hanging out today.

Got a fun one coming tomorrow. I won't spoil that one for you. And then I think Friday I'm going to be back home. I don't know, we'll see. But thanks for coming hanging. I'll see you tomorrow. Sa.